Tower bids $90m for Fidelity Life

New Zealand insurer
Tower Limited
has made a $NZ118 million ($90 million) bid for rival Fidelity Life Assurance Company.

Tower, which is listed in both Australia and New Zealand, is offering $NZ82 per share, comprising $NZ55 in cash and $27 in the market equivalent value of Tower shares. The offer represents a premium to the last traded price for Fidelity of $80.

Goldman Sachs is advising Tower.

Tower chairman Tony Gibbs said: “Bringing together these two iconic New Zealand controlled life insurance companies will reinforce their ability to compete in an industry where most players are overseas owned."

In addition to life insurance, Tower also offers health cover, general insurance and wholesale and retail fund management. Fidelity covers similar markets in addition to providing business insurance.

Fidelity was founded by Gordon and Shirley Watson in 1973 with a vision of a New Zealand owned and controlled life insurance company. It provides life insurance, personal protection, business insurance, and savings and investment products in New Zealand, including KiwiSaver products.

The offer is conditional on a 90 per cent level of acceptances and on certain other matters being confirmed in respect of Fidelity's financial position.

Tower has based its offer on publicly available information and will ask Fidelity for access to certain additional information.